NOK 700 million better than the stock exchange benchmark

Gaute Garshol, Alexander Miller, Lars Christian Tvedt

Over the three years from 2007 to 2009, Ferd Invest has generated a return that is approximately NOK 700 million better than the stock exchange benchmark indices used to measure the business area’s performance.

“We are particularly pleased that we not only beat the indices when markets were rising in 2007 and 2009, but also in 2008. This was the year that saw the worst slump in share prices in recent times”, comments Alexander Miller, Director - Ferd Invest. He goes on to explain that the strong investment results reflect Ferd Invest’s good track record for its market view, combined with its flexibility in strategic positioning and its success in investing in the right shares.

Flexible strategyAfter taking advantage of the strong rally in share prices in 2007, the investment team, which includes portfolio managers Gaute Garshol and Lars Christian Tvedt in addition to Alexander Miller, had a pessimistic view of the market prospects for stock exchange listed shares. The three of them accordingly worked on creating a portfolio of shares in strong companies in industries that they believed would perform relatively well in a falling market, and this proved to be a successful strategy.

“However, towards the end of 2008 we began to anticipate a further change of market direction, this time heading for a new rally. We accordingly switched to a more aggressive strategy. The time was right again to take more risk, and to invest in industries with growth potential. This meant that we also benefitted from the strong rally in share prices seen in 2009”, explains Alexander Miller.

Calmer stock market conditions in 2010Alexander Miller believes that the darkest clouds on the economic horizon have now blown over, at least in the Nordic countries which represent Ferd Invest’s geographic area of operations. This indicates that the market is about to level off, although the rally may continue for a little time to come.

“The situation in Greece and some other EU countries is of course creating some uncertainty, but we expect to see significantly less volatility in the Nordic stock markets in 2010 than was the case in the two previous years. This means that the overall market view will no longer be so important for investment performance, and instead it will be more important to pick the best individual shares. This has in any case been our main focus since as early as last autumn when we began to focus on identifying companies with particular potential”, says Alexander Miller.

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